A monopolist faces market demand given by P = 140

Question

A monopolist faces market demand given by P = 140 - Q.For this market,MR = 140 - 2Q and MC = 20.What quantity of output will the monopolist produce in order to maximize profits

Quizplus · Accepted Answer

To maximize profits, the monopolist should produce where MR = MC.

Setting MR = MC: 
140 - 2Q = 20 
Solving for Q: 
Q = 60

Thus, the monopolist should produce and sell 60 units of output in order to maximize profits.